Christina Villeneuve, CPA

Tax Preparation and Tax Planning Services. Over 30 years experience!

Student Loan Interest Deduction – Did You Know?

If you have student loans, you may be able to deduct up to $2,500 per year in loan interest on your federal tax forms. Because this deduction is classified as an adjustment to your gross income, you do NOT have to itemize deductions in order to claim it.

For any loan on which you paid $600 or more in interest during the year, you should receive a Form 1098-E from the loan issuer to help you prepare your federal return.

The student loan interest deduction is phased out for individual taxpayers with a modified adjusted gross income above $65,000 (or $135,000 for joint filers). Additional IRS rules may affect whether your loans qualify for the deduction.

irs.gov

Taxpayers should be on the lookout for new versions of these two scams | Internal Revenue Service

https://www.irs.gov/newsroom/taxpayers-should-be-on-the-lookout-for-new-versions-of-these-two-scams

irs.gov Tax Tip 2019-86, July 2, 2019

Home Energy Tax Credits – Did You Know?

If you purchased alternative energy equipment for your home in 2018, you may be eligible for a tax credit of up to 30% of the cost of materials and installation. Qualifying equipment may include solar water heaters, solar panels, and fuel cell systems. If you end up owing no tax for 2018, you may be able to carry any surplus energy tax credit over to future years.

Under current laws, credits for home renewable energy equipment may be reduced after 2019 and will expire completely in 2021.

Summer Jobs - Did You Know?

If you're starting a summer job or know a teen or student who is, here is a useful tax-saving tip:

Students and teenage employees normally have taxes withheld from their paychecks by their employer after filling out a Form W-4.

However, if the job is regarded as self-employment, like baby-sitting or lawn care can be, they should keep good records of all expenses to help maximize potential deductions.

In the case of lawn care, potential deductible expenses may include: business cards, fliers, fuel, equipment rentals, chemicals, work mileage, etc.

Quarterly Estimated Tax Payments - Reminder

If you are making quarterly estimated tax payments to the IRS, the due date for the April 1 - May 31 quarter of the year is June 15th.

For payments made using IRS Direct Pay, you can make payments until 8PM EST, and for payments using a credit or debit card, payments can be made up to midnight on the due date.

If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be considered on time if you make it on the next day that's not a Saturday, Sunday, or legal holiday.

Overseas Tax Filing Extension Deadline - Reminder

If you are a U.S Citizen or Green Card Holder living abroad or in active military service and have not filed your taxes yet, the deadline is coming up on June 17th, 2019.

The extension is for the date to file, not to pay. Any interest on the taxes owed will be calculated from the regular due date of the return, April 15th, 2019.

National 529 College Savings Day - Did You Know?

If you put money in a 529 account for education, withdrawal of earnings are tax-free if used for qualified educational expenses. Qualified educational expenses include tuition, fees, housing, meals and books. Many states offer a full or partial tax deduction for 529 plan contributions. They may also offer incentives and promotions to encourage families to open and contribute to 529 accounts today for National 529 College Savings Day.

The 2017 Tax Cuts and Jobs Act (TCJA) also expanded eligibility for 529 savings plans. Up to $10,000 per year can now be used for Kindergarten through Grade 12 education (public, private, or religious schools). This was previously limited to post-secondary education only.

Charitable Donations of Property – Did You Know?

If you choose to itemize, donating furniture, vehicles, or other property to IRS-approved charitable organizations allows you to improve the lives of others while reducing clutter in your own, all while gaining a valuable tax deduction. In many cases, the allowed deduction is equal to the fair market value of the property you donate. However, for property that appreciates in value, such as artwork or musical instruments, special rules govern the allowable deduction amount.

The size of your deduction may also be affected by your adjusted gross income (AGI) and whether you made monetary charitable donations during the same tax year. Deductions of $250 or more require a written acknowledgement from the receiving organization, and those of over $500 require additional documentation. Any deduction for a donation of property valued at over $5,000 requires a certified appraisal.

Home Equity Loan Interest Deduction – Did You Know?

The Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the deduction for interest on most home equity loans. However, you may still be able to deduct some or all of the interest you paid on a home equity loan if you used loan funds to build, expand, or substantially improve your home.

Examples of potentially qualifying projects include building a carriage house or three-season porch, expanding your garage, or replacing your roof.

Education Benefits - Did You Know?

The 2017 Tax Cuts and Jobs Act has expanded eligibility for Section 529 savings plans. Up to $10,000 per year can now be used for Kindergarten through Grade 12 education (public, private, or religious schools).

This was previously limited to post-secondary education only.

Education Benefits - Did You Know?

The 2017 Tax Cuts and Jobs Act has expanded eligibility for Section 529 savings plans. Up to $10,000 per year can now be used for Kindergarten through Grade 12 education (public, private, or religious schools).

This was previously limited to post-secondary education only.

Refund Amounts - Did You Know?

If your refund amount is different than stated on the filed tax return, part or all of your refund may have been used to pay off (offset) past-due federal tax, student loans, state income tax or other past-due debts.

You'll receive a notice from the IRS if such an offset occurs that will show the original tax refund amount, the offset amount, as well as the name, address and telephone number of the agency receiving the payment.

If you have not received your refund yet, you may check the status using the tool at: https://www.irs.gov/refunds. The 'Where's my Refund' tool is updated once daily, usually overnight. Your status is generally available within 24 hours upon the IRS receiving your e-filed return and 4 weeks after mailing your paper return.

Reduce Fees & Penalties - Did you know?

You should still file your taxes, even if you can't pay.

In most cases, the failure-to-file penalty is 10 times more than the failure-to-pay penalty. So if you can't pay in full, you should file your tax return and pay as much as you can.

Federal Tax Extensions - Did You Know?

If you file for an extension on your federal income tax return, you don't have to file your taxes until Oct 15th, 2019 but you still had to pay any taxes due by April 15th, 2019 to avoid penalty and interest charges.

Unclaimed Refunds - Did You Know?

The IRS has issued a reminder that time is running out for those that didn't file a 2015 federal tax return. There are currently unclaimed refunds that total more than $1.4 billion, and the 2015 returns must be filed by April 15, 2019. Residents of Maine and Massachusetts have until April 17.

No penalty will be charged for filing a late return for those receiving refunds and there is a limited three year window to claim a refund. If unclaimed, the money becomes the property of the U.S. Treasury.

April 15th is also the Tax Day deadline for 2018 taxes.

Quarterly Estimated Tax Payments - Reminder

If you are making quarterly estimated tax payments to the IRS, the due date for the January 1 - March 31 quarter of the year is April 15th.

For payments made using IRS Direct Pay, you can make payments until 8PM EST, and for payments using a credit or debit card, payments can be made up to midnight on the due date.

If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be considered on time if you make it on the next day that's not a Saturday, Sunday, or legal holiday.

April 15th is also the Tax Day deadline for 2018 taxes.

[04/06/19]   This tax season has been one for the books. The redesigned 1040 is AWFUL. The 'postcard': what a joke! Is it 4/16 yet??

Quarterly Estimated Tax Payments - Reminder

If you are making quarterly estimated tax payments to the IRS, the due date for the January 1 - March 31 quarter of the year is April 15th.

For payments made using IRS Direct Pay, you can make payments until 8PM EST, and for payments using a credit or debit card, payments can be made up to midnight on the due date.

If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be considered on time if you make it on the next day that's not a Saturday, Sunday, or legal holiday.

Retirement Contributions - Did You Know?

If you haven't already funded your retirement account for 2018, you may still do so. You have until April 15, 2019 for contributions to a traditional IRA, deductible or not, and to a Roth IRA.

Your total contributions to all your traditional and Roth IRAs can't be more than $5,500 ($6,500, if age 50 or older) or your taxable compensation for the year, if your compensation was less than this dollar limit. Making a deductible contribution may help you lower your tax bill this year.

This IRA contribution limit does not apply to rollover contributions and qualified reservist payments.

Federal Tax Extensions - Did You Know?

If you file for an extension on your federal income tax return, you have until Oct 15th, 2019 file your taxes, but you still have to pay any taxes due by April 15th, 2019 to avoid penalty and interest charges.

Tax Related ID Theft - Did You Know?

Tax related ID theft is when someone uses your information (name, SSN, etc.) to file a false tax return and claim a fraudulent refund. The number one thing you can do to prevent this type of ID theft is to file early and file electronically. The IRS is “first-come, first-served”, meaning whomever files first, electronically, will be the only electronic return accepted. All others for that SSN will be blocked and have to file manually. This can lead to big delays for your refund. Filing season began January 28 this year.

Second Home, Cabin, and Vacation Property Owners – Did You Know?

If you own a second home or vacation property that you live in only occasionally and rent out at other times, you might be able to deduct expenses you pay to maintain the property from your rental income. In addition, you might be able to classify the home as investment property instead of personal property, which offers multiple tax and estate-planning benefits.

In order to fully qualify to deduct expenses and/or designate the home or cabin as investment property, you must meet one of the following two requirements:

1. You use the property as a dwelling for no more than 14 days per year AND rent it out for at least 15 days per year.
2. You use the property as a dwelling for more than 14 days per year but not more than 10% of the number of days you rent it out. For example, if you rent out the home for 200 days a year, you may use it as a dwelling for up to 20 days.

Please note that under IRS rules, “using as a dwelling” includes not only using the home yourself, but also offering use of the home to friends, family, anyone with a financial interest in the property, or anyone who pays less than a fair rental price.

Tax Credits vs. Deductions - Did You Know?

Tax credits directly reduce the amount of tax you owe, reducing the dollar amount of your tax liability. If you receive a tax credit of $500, that lowers your taxes owed by $500. Tax credits can also be refundable such as the EITC and CTC where, if the credit is more than what you owe, you may receive a refund check.

Tax deductions reduce how much of your income is subject to taxes. If you made $60,000 in a tax year and got a $500 tax deduction, your tax bill would be calculated based on an income of $59,500.

Refund Amounts - Did You Know?

If your refund amount is different than stated on the filed tax return, part or all of your refund may have been used to pay off (offset) past-due federal tax, student loans, state income tax or other past-due debts.

You'll receive a notice from the IRS if such an offset occurs that will show the original tax refund amount, the offset amount, as well as the name, address and telephone number of the agency receiving the payment.

If you have not received your refund yet, you may check the status using the tool at: https://www.irs.gov/refunds.

New State Tax Filing Rules Under TCJA – Did You Know?

Historically, many states have closely modeled their income tax regulations after federal laws, allowing taxpayers to complete state returns very quickly after filing their federal forms. However, some states have not yet updated their forms and rules to comply with the sweeping federal tax code changes introduced under the 2017 Tax Cuts and Jobs Act (TCJA). As a result, in addition to any impact it has on your federal taxes, the TCJA might significantly affect procedures for filing your 2018 state tax return.

You may need to provide additional information and documentation not required for your federal returns. You may also be able to claim deductions at the state level that are no longer allowed on IRS forms, or find that certain deductions created under the TCJA cannot be claimed on your state return.

Increased Standard Deduction for Seniors – Did You Know?

If you were born before January 2, 1954, you may qualify to increase the standard deduction on your 2018 federal tax returns by as much as $1,600 (or $2,600 for joint filers). Because your standard deduction reduces your taxable income, a larger deduction means a lower tax bill.

Your eligibility for the increased standard deduction depends on your age, your spouse's age, your filing status, your citizenship/residency status, and other factors. A tax professional can help you determine whether you qualify, and show you how to claim the full deduction you are allowed.

Where's My Refund? - Did You Know?

You can use the IRS 'Where's my Refund' (https://www.irs.gov/refunds) tool to check the status of your refund. The 'Where's my Refund' tool is updated once daily, usually overnight. Your status is generally available within 24 hours upon the IRS receiving your e-filed return and 4 weeks after mailing your paper return.

[03/05/19]   Postcards were mailed today to all clients who still owe me their tax info

New Tax Bill Standard Deductions - Did You Know?

For those that opt to take the standard deduction on their taxes rather than itemized deductions, the Tax Cuts and Jobs Act (TCJA) increases the amount you can deduct until 2025, when the provision is set to expire.

The amount goes from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for those filing jointly.

Taxpayer Bill of Rights - Did You Know?

As a taxpayer, you have a set of ten fundamental rights that the IRS is obligated to protect.

They are:

1. The Right to be Informed.
2. The Right to Quality Service.
3. The Right to Pay No More Than the Correct Amount of Tax.
4. The Right to Challenge the IRS's Position and Be Heard.
5. The Right to Appeal an IRS Decision in an Independent Forum.
6. The Right to Finality.
7. The Right to Privacy.
8. The Right to Confidentiality.
9. The Right to Retain Representation.
10. The Right to a Fair and Just Tax System.

More information can be found in IRS Publication 1: Your Rights as a Taxpayer, available here: https://www.irs.gov/pub/irs-pdf/p1.pdf.

Reduce Fees & Penalties - Did You Know?

You should still file your taxes, even if you can't pay.

In most cases, the failure-to-file penalty can be 10 times more than the failure-to-pay penalty. So if you can't pay in full, you should file your tax return and pay as much as you can.

EITC and ACTC - Did You Know?

If you're claiming the Earned Income Tax Credit or Additional Child Tax Credit, both of which are refundable credits, your refund will be released by the IRS starting from February 27, 2019. A refundable credit is one which gives you cash back even if you didn't pay any tax into the system during the year.

You may check the status of your refund at https://www.irs.gov/refunds.

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